The decade-long maintenance backlog of rolling stock by Transnet Freight Rail has been given a significant boost after the state-owned logistics company forced the hand of one of its original equipment manufacturers to release critical spare parts and components.
Transnet yesterday reached an in-principle agreement with China Railway Rolling Stock (CRRC) E-Loco towards the resolution of all current legal disputes between the two companies.
Two weeks ago, Transnet launched an application in the High Court to compel CRRC to release the spare parts and components required to return 120 locomotives to service.
The spare parts and components were imported to service and maintain the 95 Class 20E and 100 Class 21E dual-voltage electric locomotives which Transnet Freight Rail had acquired from CRRC in 2012 and 2014, respectively.
Access to the spare parts and components would allow Transnet to bring back to service 53 Class 20E and 67 Class 21E long-standing locomotives and contribute to timely maintenance of these two fleet classes.
Transnet spokesperson Ayanda Shezi said the agreement towards the resolution of all current legal disputes would enhance Transnet Freight Rail’s ability to serve customer demand on an urgent basis.
“The next steps will be to finalise a definitive settlement agreement and complete the resolution of the current legal disputes,” Shezi said.
Old Mutual Wealth investment strategist Izak Odendaal welcomed this agreement as South Africa has not been able to increase coal export volumes due to Transnet’s inefficiencies.
“It is obviously a positive development that could hopefully alleviate some of the operational problems on the rail system that have severely hampered coal exports,” Odendaal said.
“However, it is too soon to say when things will start improving and by how much they will improve given that the other challenges such as cable theft also need to be addressed.”
Transnet Freight Rail lost more than 15 million tons of freight volumes in the year ending March 31 after declaring force majeure due to irregular locomotive acquisition, maintenance problems and massive cable theft on its coal line.
The group’s performance for the year was affected primarily by a reduction in the number of locomotives due to maintenance problems.
In the 2021/22 financial year, Transnet Freight Rail only had 1 656 locomotives, a 25 percent decline from 2 215 locomotives, which significantly reduced its ability to move goods.
Earlier this month, the African Rail Industry Association (Aria) warned that the South African rail industry was in trouble due to massive maintenance backlogs threatening the sustainability of Transnet.
Aria said it was concerned about Transnet Freight Rail’s big cutbacks in essential maintenance over the past 10 years as spending on maintenance had dropped by R750 million, from R3.4 billion in 2012 to R2.7bn in 2022.
But Transnet defended itself and said a significant amount of work had been undertaken internally to improve procurement time frames for key contracts, which have been a significant cause of delay in the past.
BUSINESS REPORT